India's Rice Exports To Bangladesh Delayed Over Pricing.

The export of 300,000 tons of rice from India to Bangladesh has stalled as Bangladesh has sought a discount on the proposed sale price, complicating approvals for the shipment, Indian government officials said.

Bangladesh has asked India to supply common grades of parboiled rice at slightly below $491.8 a ton--the price at which it bought from the international market in mid-October. State-run Indian trading agencies sought government approval to sell the rice at $486.8 a ton.

The request from Bangladesh has put the Indian government in a dilemma as it will have to sell way below the prevailing global price of $520-$540 a ton, and may also have to absorb some procurement costs.

Supplying non-basmati rice at $486.8 a ton after discount will add to the already inflated subsidy bill, an India food ministry official. In August, India decided to honor a diplomatic request and agreed to export 300,000 tons of parboiled rice and 200,000 tons of wheat from federal stocks to Bangladesh, but the price negotiations have delayed the shipments.

India also wants Bangladesh to inspect and verify the quality of the grain before it is shipped, rather than waiting for it to reach Bangladeshi ports as costs will mount if there's a delay in unloading or the country rejects the consignment.

Bangladesh urgently needs supplies as it is facing a local rice shortage. Contracts totaling more than 300,000 tons were canceled by suppliers earlier this year due to a drought in the producing Black Sea region.

The South Asian country is also planning to ask India to supply at least half-a-million tons of grain each year under a long-term pact to secure stocks and partly hedge against any global shortfall of grains.Bangladesh expects to import one million tons of rice and around 750,000 tons of wheat in the year through June to tide over the local shortage.

Source : indiainfoline.com